See also

This section contains the essential information about InstaForex. In particular, you will learn about the company's history, its major achievements, advantages, and awards. Here, you will get to know InstaForex team. Besides, you will find out the latest news and events arranged by the company.

This section is a must-read for those, who decided to start on trading in Forex. Here, you will find everything that will ensure a successful start in trading: the basics of trading principles, guidelines, instructive articles, video tutorials, training courses, forex library, demo accounts, free lessons, and many other helpful materials.

This section is aimed at those who have been operating in Forex. Here, you will get an insight about trading conditions with InstaForex. Besides, you will learn about ways of depositing your account and withdrawing money from it. You will be provided with analytical articles, charts, video reviews of financial markets, news updates, photo events, contests, promo campaigns, InstaForex sports projects etc. The most important, you will gain access to a facility to open a trading account.

This section is created for those, who have already entered into partnership with InstaForex or who is interested in being a partner. Here, you will find exhaustive information on how to join InstaForex team as a partner. Besides, we will tell you about different forms of partnership and ways of attracting clients. There is also Partner Area in the section.

This is a universal section with a great number of web resources and charts. It is a mine of forex-related information. Feel free to express and swap your ideas! Forums for traders, corporate blogs, humor, and a large Forex portal are available to everyone.

Williams Alligator indicator: description, adjustment and application

The Alligator is a trend-following indicator which was developed by legendary trader Bill Williams. He discovered that financial markets and individual securities trend just 15-30% of the time, while markets trade in a sideways manner the other 70-85% of their operation time. He believes that traders can generate most of their profits during strongly trending periods. The Alligator indicator allows traders to assess a market condition at a particular time and find the right time for a market entry.

On a chart, the Alligator consists of three smoothed moving averages which are plotted by means of fractal geometry and nonlinear dynamics.

The Alligator’s Jaw (a blue line on a chart) is a line for a time frame which was used for plotting the chart. It is a 13-bar SMMA (smoothed moving average) which is shifted by 8 bars on subsequent values.

Teeth (a red line on a chart) is a line for a lower time frame. It is an 8-bar SMMA, shifted by 5 bars on subsequent values.

Lips (a green line on a chart) is a line for an even lower time frame. It is a 5-bar SMMA, shifted by 3 bars on subsequent values.

Thus, the Jaw, Teeth, and Lips show interaction of different time frames. As the market reveals an obvious trend for 15-30% of its time, it is wise to follow a trend and avoid trading in markets during range-bound periods. When the Jaw, Teeth, and Lips are tightly clenched (the lines are crisscrossing each other on the chart), the Alligator is already asleep or is going to fall asleep.

When the beast sleeps, its hunger gets worse. The longer it sleeps – the hungrier it will be when it wakes up. When the Alligator wakes up, it immediately opens its mouth wide. Then, the Alligator is alert to the activity of either bulls or bears in the market and starts a hunt. When the Alligator relieves its hunger, it loses interest in a price that is clear when the lines on the chart converge into narrow bands. It means the trend comes to an end, signaling a good time to lock in profits.

Calculation

MEDIAN PRICE = (HIGH + LOW) / 2

ALLIGATORS JAW = SMMA (MEDIAN PRICE, 13, 8)

ALLIGATORS TEETH = SMMA (MEDIAN PRICE, 8, 5)

ALLIGATORS LIPS = SMMA (MEDIAN PRICE, 5, 3)

Where:

MEDIAN PRICE is an average price;

HIGH is the highest price of the bar;

LOW is the lowest price of the bar;

SMMA (A, B, C) is a smoothed moving average. The A figure is a smoothed data, B is a smoothing period, C is a future value. For example, SMMA (MEDIAN PRICE, 5, 3) means that a smoothed moving average is based on the median price. At the same time, a smoothing period equals 5 bars and a subsequent value is 3;